Essar Steel has forayed into high-growth defence manufacturing sector by developing steel grades which find application in land and naval defence. The steel company aims to participate in the indigenisation of products used in naval defence.
BHUBANESWAR: Essar Steel has forayed into the high growth defence manufacturing sector by developing steel grades which find applications in land and naval defence. The estimated expenditure in defence sector is projected at over $200 billion over the next five years.
The company has developed several products which are import substitutes as well as innovated to develop indigenous armour plate for ballistic protection.
Essar Steel’s import substitute products have been used in the construction of advanced naval destroyers, offshore patrol vessels and floating docks. They also provide ballistic protection to combat vehicles and battle tanks. In addition, Essar Steel products are used in the construction of Coast Guard vessels and in the repair of naval ships.
The steel company aims to participate in the indigenisation of products used in Naval defence, including naval destroyers, offshore patrol vessels used by both Navy and Coast Guard, rocket launchers, floating docks and submarines. In Land defence, the products are used for battle tanks, motor casing of missiles, mine protected and combat vehicles, military and civil vehicles, artillery guns, morcha and machan.
Alongside growing domestic demand, these products also have a large export potential. Market estimates put the annual demand potential at approximately 0.2 million tonnes, of which 50 per cenr is in flat steel and the remaining in structural steel.
Dillip Oommen, managing director and chief executive officer, Essar Steel, said: “The defence sector is witnessing exponential growth. Essar Steel would like to be a part of this growing segment so we can capitalise on our strengths, which include state-of-the-art manufacturing and product development. We have developed an excellent track record by successfully supplying steel to many defence projects. This has given us the confidence and encouragement to expand our product portfolio for this segment.”
The revised defence procurement policy 2016 encourages ‘Make in India’ and supports indigenous manufacturing of defence equipment and spares. The goal is to achieve an indigenisation level of 60 to 70 per cent, against the existing 40 per cent.
Apart from saving foreign exchange for clients, it will bring about self-sufficiency and self-reliance, as well as position the country as an exporter of defence goods. The Union Budget for 2017-18 outlays a defence expenditure of $53.50 billion, up from $30 billion in 2009-10. About 80 to 90 per cent of defence manufacturing in India is dominated by the PSUs and the Ordnance Factory Board (OFB). However, several big corporate houses in India have also forayed into this sector and have announced partnerships and expansion plans. While Essar Steel has been servicing the defence sector for the past six to seven years, the entry of private players in this sector has enhanced the marketability of its products.